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How is the residential property market performing 2021?
When it comes to the different industries and market sectors weathering the disruption caused by the COVID-19 pandemic, few can compete with the standout performance of the residential property market, which has shown shoots of positive growth, particularly in our area of Ryedale.
A key driver of real economic growth, productivity and investment, residential property, particularly those homes enjoying flexible live-work accommodation and outdoor space, has been in high demand amongst international and domestic buyers.
The numbers are impressive. Over the course of 2020, the average price of a residential property experienced its highest level of growth witnessed since 2015 – finally putting an end to the four years of price stagnation as a result of Brexit uncertainty.
In fact, during the opening three months of 2020, Rightmove recorded the greatest surge in Q1 house price growth since 2003. This is all the more impressive given such growth occurred amidst the pandemic.
As a result, the average house price in the UK rose by 6% in Y2020.
This has continued into January 2021, where we have seen an unprecedented level of interest in our properties in Ryedale. We have carried out 100s of viewings, in compliance with Covid-19 guidelines and already agreed sales on properties at a combined value of over £5million. Sales completions have also bucked the trend for this time of year, with February forecast to break our own projections, set at the end of 2020.
Given the context that this pattern is occurring during a global pandemic and a time when a large number of traditional mortgage products have been taken off the shelf, we should not downplay the success of the residential property market.
The reason for this sudden spike in demand can be attributed, in part, to the Stamp Duty Land Tax (SDLT) holiday. Announced on 8th July 2020 by Chancellor Rishi Sunak, the SDLT holiday offers savings of up to £15,000 for those transactions taking place in Northern Ireland and England.
The SDLT holiday is due to expire on 31st March 2021, yet given its’ success in unlocking property investment and transactions, calls are mounting for the Chancellor to extend the holiday so that buyers do not risk missing out and to avoid a “cliff-edge” scenario. Indeed, the petition to extend the SDLT holiday by a further six months will be discussed in Parliament on Monday 1 February.
Mainstream lenders are already anticipating a flurry of new enquiries as buyers look to take advantage of the holiday during this closing window of opportunity.
With the Chancellor set to deliver the 2021 Spring Budget on 3 March, the wider property market is hoping he will use this opportunity to announce an extension of the SDLT holiday. There is also talk in wider circles that the Chancellor may use the Budget as an opportunity to overhaul the property tax regime entirely, including council tax and capital gains tax. However, this will not happen overnight, and the broad consensus is that these measures will be consulted upon over a period of time, before a raft of changes are made.
There are clear merits in extending the SDLT holiday. Few could have expected such a positive response and, with enquiries still high, I believe there is still a role for the holiday to play in stimulating property transactions and promoting confidence. This is important not just for the industry, but the wider real economy, which needs every boost at this time of Lockdown 3.0.
How can we help you?
If you are considering putting your home on the market, give me or one of the team a ring and we can discuss your options and alleviate any concerns you may have.
StephensonsRural and Boulton Cooper
T: 01653 692151
M: 07739 983806